MSU Federal Credit Union Fosters Financial Literacy and Fintech Innovation Through Its Incubator

Msufcu Fosters Financial Literacy And Fintech In Greater Michigan

In a Nutshell: MSU Federal Credit Union started as a service for faculty and staff, but has expanded to other areas of Michigan. Through the use of credit tools and financial education outreach, the credit union hopes to create broad appeal in the community. It also has developed an incubator it calls The Lab that focuses on fintech innovation that benefits the credit union industry.

MSU Federal Credit Union (MSUFCU) began as a financial institution for Michigan State University faculty and staff in 1937, although the school was under a different name at the time. It was started by eight faculty members who realized that credit and access to credit was still quite difficult for the average person to attain after the Great Depression. So they created an organization that could service members of the school and provide access to funds when needed.

MSUFCU has since expanded and is now the 42nd largest credit union in the nation, the second largest in Michigan, and the largest university-based credit union in the world. And in 2008, MSUFCU moved to its first off-campus headquarters.

MSUFCU logo banner

After merging with another credit union in Oakland County in 2015, MSUFCU increased its outreach capacity even further.

Now, anyone who resides, works, worships, attends school or owns a business in any of the five counties of Oakland, Genesee, Lapeer, Livingston, and Macomb can join the credit union.

MSUFCU’s Chief Marketing Officer, Deidre Davis, says the credit union has a much larger footprint now and is looking to continue its expansion in Michigan areas. “There are about 2 million people in Oakland County alone who are eligible to open accounts, but they might not realize it.”

With roughly 1,000 employees and about $6.9 billion in assets, MSUFCU primarily caters to those living in Michigan, boasting a membership base of over 325,000. But members who move out of state can still enjoy using all of the same services as before, even if they live in other countries around the world.

Serving Financial Education to the Community

MSUFCU has a team that is dedicated to helping its community improve financial literacy through its educational portal that offers educational videos, articles, podcasts, and interactive quizzes. It also provides users with financial management tools and numerous calendar events that anyone can attend.

“We believe that whether you’re a member or not, you can benefit from our teachings,” says Davis. “We want you to be a part of this.”

Last year, the financial literacy team gave nearly 1,500 presentations that covered topics on learning about credit scores, understanding what credit is and how to build it, first-time homebuying, rebuilding credit, estate planning, navigating Social Security, and many other topics.

MSUFCU also holds reality fairs at area high schools so students can learn how to manage their finances by looking at income, expenses and various situations through assigned role-playing activities.

The credit union is also making an effort to help 14 to 17 year olds understand the basics of building good credit and how credit works through its Rock Star Credit Mailer, which provides resources for learning.

“We want people to use credit wisely, and I can’t say it enough that it does not benefit anyone if people don’t use credit wisely, and they end up getting in trouble financially,” says Davis. “We celebrate when people are paying off their cars, and their houses, because they’re really taking the steps necessary to achieve a secure financial standing for themselves.”

MSUFCU currently offers five different youth programs and provides educational outreach throughout the year to help make learning about finances fun for children. “If you’re learning at a young age about saving, making a budget, and spending wisely, it will carry you through your life and really serve you well,” says Davis.

Product Offerings and Tools to Build Good Credit

To differentiate itself from other credit unions, MSUFCU has developed a number of services to help its members balance budgets and improve credit scores.

In 2020, MSUFCU launched a product called Savings Builder that is designed to help people save at least an initial $1,000 faster. It is a blended rate account that pays dividends at lower tiers, unlike traditional savings accounts that gain higher dividends when more savings are retained.

The Savings Builder program was created after identifying that a higher than expected number of members had less than $1,000 in their savings accounts. So far, the results have been positive, and Davis is pleased to note that MSUFCU has successfully helped many of its members save more money and established emergency funds.

Another program MSUFCU has developed is Rebuild Checking, an account that helps individuals rebuild their damaged credit.

Photo of Deidre Davis, MSUFCU Chief Marketing Officer
Deidre Davis, MSUFCU Chief Marketing Officer

One of the limitations on Rebuild Checking is that members cannot deposit funds through an ATM. Instead, they must do that either through a teller line or drive-thru. As they build up their credit history through responsible use of their checking account, members can transition to regular checking accounts.

Members can also apply for Money Market Checking, which allows them to earn dividends on checking balances of $2,000 or more. The dividends are calculated daily and paid monthly, so members earn higher dividends on higher balances.

Davis notes that MSUFCU has saved its members about $110 million in interest loans since 2013. The credit union has made a substantial difference in people’s lives, enabling members to pay off student loans, send a child to summer camp, or afford braces for their daughter.

“These are real stories that we hear. And they’re extremely impactful to everyone that works here, because we can see the difference that we’re making,” says Davis.

The Lab at MSUFCU Encourages Fintech Development

The pandemic has had major effects on how people deal with their finances, as reported by CNN Business. One of those being a large shift to fintech apps and services. This shift has also led MSUFCU to pursue new ideas of its own.

In 2020, MSUFCU developed The Lab to identify, create, and execute opportunities for innovation at the credit union. The goal was to create small pilot programs that would then lead to new technology, products, and services for MSUFCU members and employees.

Each pilot is cultivated for niche groups. Members can sign up to test specific pilots for a couple of months and determine their usefulness from a member experience perspective.

One of the earlier products the Lab piloted was ChangEd, an app that helps members pay down their student debt by rounding up every purchase they make. The spare change goes into an account, and once it reaches a certain level, the balance is automatically sent to pay off the individual’s student loans.

Another of the Lab’s pilots is a virtual finance coach that assists individuals by asking a series of questions to identify their goals and generate suggestions on how they can meet those financial goals.

Davis noted that MSUFCU would also like to see the fintech innovations from the Lab gain exposure with other credit unions.

“We are hopeful through our work in the lab that we can help other credit unions,” says Davis.

“We see a real link and a need to link fintechs with credit unions. We’re excited to be leading the way in a lot of those efforts.”

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